The finance systems and statements in banks present a unique analytical problem compared to other sectors like manufacturing and servicing companies, as a result they found in distinct approach which is somewhat a distinctive risk. These banks serve people in taking deposits and lending them back whenever they require along with interest. They pass these funds to other borrowers on receiving interest on them. By managing the flow of lending and receiving the funds generates their profits which acts as an intermediary of interest paid and interest received and taking on the risks of offering credit. As a result investors and creditors will have high impact in this industry and value their performance in different economic conditions and how they effectively use their capital resources to sustain in the industry.
This research study examines the financial analysis of one of the predominant bank in the world Standard Chartered Bank. This research study particularly examines and analyzes how the bank deals with their structure and focuses on analyzing the financial performance. The main objective of the study is to identify the overall financial performance of the company. The data have been collected from the financial statement and annual reports of the company for the past four years.
The collected data are properly present in the form of tables and analyzed carefully to draw the necessary inferences and conclusion. Finally based of transition are given. For the purpose of requisite financial data have to be obtained and evaluated after a scrutinizing and the steps required to ensure that they are met and financial stability is maintained.
To, analyze statement of four years through accounting ratios, schedule of change in working capital, permissible bank financing and cash flow activities. So it will give some useful suggestions to the management with regard to financial aspects. Therefore, I believe this project would be very useful for the future scholars to refer this information.
1) INTRODUCTION OF RESEARCH STUDY
Background Of The Research Study
For every organization there should be proper financial operation which is highly important to explore and sustain their business activities in this competitive world. The firm should have proper capital assets or resources for smooth day to day operation (Horne and Wachowicz, 2000). Corporate finance is an area of finance dealing with financial decisions business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm's financial risks. This corporate financial operation basically deals with the analysis of capital structure, capital budgeting, and working capital management of the firm. The efficient capital management involves in planning and controlling current assets and liabilities to reduce the risk in eliminating the inability to meet due short term and also to avoid excessive investment in other forms of assets (Eljelly, 2004). Liquidity for the on-going firm is reliant, rather, on the operating cash flows generated by the firm's assets (Soenen, 1993). As a result, working capital management of a company is a very sensitive area in the field of financial management (Joshi, 1994). It involves the decisions about the amount and composition of current assets and the financing of these assets. The other method used is financial statement analysis which is majorly used by the third parties like creditors, investors, shareholders, management in order to evaluate the past, present and the future predicted performance of the company. The common system of financial analysis is Ratio Analysis. Ratio Analysis is important diagnostic tool that helps to identify problem areas and opportunities within a company. These tools can be used for benchmarking against the comparison of rival industry, analyzing the performance in economic condition and also the past value performance of the company. It provides comparative values of the organisations conditions and performance.
The other popular form of analysis is Horizontal and Vertical Analysis statements. Horizontal analysis is to estimate the trend in the accounts during the years whereas the vertical analysis also referred as Common size financial statement evaluates the internal structure of the organisation. It indicates the relationship between sales and income reports. It is report of mixed assets of organisation that produce income and the mix of the sources of capital by long term debt or by equity funds. The financial ratio analysis is an important agenda item in investment which is widely used to summarize the company's financial statements in assessing its financial health. In this modern IT world the real time financial data are readily available through internet and the resources like Standard & Poor's Corporation Records, Robert Morris Associates' Annual Statement Studies, Moody's Manuals, Dun & Bradstreet's Key Business Ratios, Value Line Investment Survey, etc. Since the investors and realtors have easy access to online database the assignments on financial ratio analysis can be modified accordingly to enhance learning. In the current situation the instability of finance become rife and financial institutions becomes popular in aid of these main elements of financial statements which become the main hub for investors to look over the performance of the company and choosing to invest the right firm.
This research purpose is for academic learning. This research study covers the close examination of the importance of the financial management in the firm. Through applying the various financial equations like ratios analysis, cash flow etc on the financial data of the standard chartered bank in India, this research study is able to give clear view of the financial management of the firm.
The summary of the project
1. The study covers the financial analysis of the company in particular.
2. This study also helps to get an idea about the importance of working capital management for an organization in general and Standard Chartered Bank, India in particular.
3. This research helps me to understand the processes of short term investments in a company.
2) AIM & OBJECTIVES
Aim
The aim of this research is to study the present financial performance of the company by analyzing the financial strength and weakness of the company and the position where it is standing in the market. From the study we can able to know the improvements that can be done in the company which will give well yield to the company.
Objectives
Primary Objective
A study on financial performance of standard chartered bank, India
Secondary objective
To analyze the working capital management of the organization
To analyze the financial ratio of the firm.
To evaluate the statement of change in financial position.
To determine the permissible bank borrowing.
To evaluate the cash flows of the firm.
3) OVERVIEW OF RESEARCH METHODOLOGY
The methodology of this research is based on the quantitative research approach. This research is totally done by studying and analyzing the secondary data. The various financial equations are use to accurately evaluate and analysis the secondary financial data. The collection of secondary data includes the books, articles, research papers, and websites of the companies, journals, government website, newspapers and various key data available through the access of the internet in relation to this research area.
The research study method information is taken from the company Standard Chartered Bank, India
4) STRUCTURE OF THE RESEARCH STUDY
This research study is structured in five chapters as follows below,
CHAPTER ONE describes the introduction to the topic and purpose of the research study, aims and objectives of the research study, overview of research methodology.
CHAPTER TWO examines the key literatures mostly consisting of theory and research papers on the working capital management and ratio analysis in the financial markets and also broadly discusses the importance of WCM and RA.
CHAPTER THREE give details of the research methodology which consist of the research technique, research method and data collection method.
CHAPTER FOUR explains the data analysis of case study of the Standard Chartered Bank, India
CHAPTER FIVE describes the research study conclusion and recommendations.
